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When people want to sell or buy something, they usually become
sensitive to any related information and soak it all in. For instance,
if you are about to have a child, baby ads for nappies all of a
sudden seem to be everywhere. Or you have just purchased a
new car and you see a similar vehicle at every set of lights you
stop at.
Subconsciously or otherwise you will have looked about your
neighbourhood and noted what’s on the market and the asking
price. You will have also seen different “For Sale” signs from
various Real Estate Agents.
So the starting point is what is the “value” of your property. That
also may help with any decision on what and where to buy.
There is a saying that a property is worth what someone is
prepared to pay for it, however that’s not strictly correct. A
property is worth what a financial institution is prepared to extend
a loan against.
There is a distinction between a valuation by a “Sworn Valuer”
and an “Appraisal” given by a Real Estate Agent. By Law (in WA
at least) a Real Estate Agent cannot give you a valuation. They
can only give an appraisal.
Real Estate Agents take into consideration similar aspects as
Valuers, but we also include local market conditions, that special
“wow” factor of a home or features such as views or a spectacular
garden. We also add a negotiation margin. Every buyer wants to
negotiate and feel as if they have secured a great deal.
However, if finance is to be sought by a buyer then the Valuation
is crucial. Finance will be declined if the contract sale price is not
somewhere near a Valuation by a Sworn Valuer.
So, it’s very important that a Real Estate Agent understands how
a Valuation is arrived at and not overprice a property just to gain
the Listing to sell it.
Similarly, owners tend to place a value on a home based on their
need to relocate, or on what they see as the asking price of similar
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